Many Ontarians have likely heard a horror story or two about their government’s growing debt and the resulting strain on public finances. You can’t blame them. Sources of evidence abound.
Ontario’s provincial government wants a balanced budget for the 2017-18 fiscal year, and Finance Minister Charles Sousa is adamant that Ontario will reach that goal.
Alberta Premier Jim Prentice has warned Albertans that the current fiscal year’s projected surplus has turned into at least a $500 million deficit and that next year’s budget will sink deeper into red-ink territory.
As Alberta’s provincial and municipal governments grapple with declining oil revenues and a weakening economy, a sober review of government spending should be part of any belt-tightening initiative. One place to start is the compensation of government employees, a key spending item for all governments.
How governments manage their finances matters a great deal. Spend and borrow too much and the result is a spiral of increasing deficits that create ever higher debt. Then, ever-more tax dollars end up spent on debt interest—not on education, health care, administering provincial courts, or other areas in which provincial governments are involved.
After governments abandon fiscal prudence, they will soon search for any and all ways to tax people more. This is the reality playing out in Alberta where Premier Jim Prentice has floated multiple tax increase trial balloons.
With oil prices plunging and provincial resource revenues expected to drop, Alberta’s red ink will rise. In response, Premier Jim Prentice has floated the notion of a provincial sales tax and/or hikes in other taxes.
Forty-one billion dollars. That’s the extra amount, over and above what was needed to keep pace with population growth and inflation between 2006 and 2013, this to fund Alberta government program spending in those years.